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This is an archived release.
Weaker growth in total output
The growth in total output was somewhat weaker in the fourth quarter of 2007 partly due to lack of capacity and shortage of qualified labour. In addition to this there are signals of falling demand in some of the export markets.
According to the business tendency survey, the Norwegian manufacturing industry experienced a further increase in output and employment in the fourth quarter, but the growth rate was somewhat weaker than earlier in 2007. Lower increase in demand from export markets, partly due to a stronger Norwegian currency, contributed to this result. The strengthening of the Norwegian currency also contributed to a more moderate growth in export prices. The number of working months covered by the current stock of orders is somewhat higher than the corresponding figure for 2006, while the indicator for bottlenecks in the production1(see table 16 ) is more or less unchanged from the previous survey due to a major shortage of qualified labour. The average capacity utilisation in the Norwegian manufacturing industry is estimated to about 85 per cent. International comparisons of average capacity utilisation are available from EUROSTAT .
The general short-term outlook (Q1 2008) is considered to be positive. The industrial confidence indicator2 is estimated to 6 (seasonally adjusted net figure). This is the lowest result since 2003, but still above the historical average. International comparisons of the industrial confidence indicator are available from EUROSTAT (EU) and the Swedish National Institute of Economic Research (Sweden).
Negative development in export markets
Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals, etc) report that the increase in total output shows signs of levelling out. A combination of no growth in new orders from the home market and a fall in new orders from the export market explain this development. An increase in the number of managers who point at weak demand and fierce competition as factors that limit production confirms these results. Domestic prices continue to grow, while export prices are going down partly due to a strengthening of the Norwegian currency. The average capacity utilisation is estimated to about 85 per cent in the fourth quarter, which is somewhat lower than at the beginning of the year.
The general short-term outlook is considered to be positive, but fewer share this opinion. Weaker development in export markets is a likely cause for this result. Prospects of reduced profitability may be the reason why fewer managers are considering an increase in gross capital investments.
Strong growth in new orders
Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity, etc) were able to increase output and employment in yet another quarter, but it is still not sufficient to keep up with the growth in total stocks of orders (see also quarterly statistics on new orders ). A strong development in home market prices must partly be seen as a consequence of this. The number of managers who point at lack of capacity and shortage of qualified labour as factors that limit production is higher than in the corresponding period of 2006, and the number of working months covered by the current stock of orders is more or less the same as one year ago. Average capacity utilisation is estimated to about 90 per cent in the fourth quarter.
The number of managers who considers the general short-term outlook to be better is more or less the same as in the third quarter. Major bottlenecks in production reduce profitability and create a need for an increase in gross capital investments (see also quarterly investments statistics ).
The supply of qualified labour limits production
Sectors producing consumer goods (food industry, publishing, pharmaceutical industry, etc) experienced a further rise in total output, but the growth rate was somewhat weaker than recorded in the previous quarters. Shortage of qualified labour seems to be the main reason for this. The fact that the growth in employment shows signs of levelling out at the same time as a rising number of managers point at supply of qualified labour as a factor that limits production supports this assumption. Market prices continue to grow in domestic and export markets. Average capacity utilisation is estimated to about 80 per cent in the fourth quarter.
A majority of the respondents consider the general short-term outlook to be better, but somewhat fewer share this opinion. There are expectations of high demand and rising prices in domestic markets.
| 1 | This indicator sums up response alternatives from the question related to factors limiting production in the current quarter and which relate to access to resources, together with the response distribution of full capacity utilisation. |
| 2 | The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003 (see Previous articles ) |
| Industry | Prospects | Background | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Food products, beverages and tobacco | ++ | Growth in output, capacity utilisation and employment. Increase in demand from the domestic and export market. Positive development in domestic market prices. The general outlook for Q1 is considered better, and the growth in production volume and demand is expected to continue in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Wood and products of wood | +(-) | Continued growth in output and employment, but reduced level of new orders in Q4 from the domestic and export market. Rise in market prices. A growing number of managers report that weak demand is a limiting factor for production. The general outlook for the forthcoming quarter is judged as better, but fewer managers share this view. Further growth in output and employment is expected. Market prices are expected to level out. | |||||||||||||||||||||||||||||||||||||
| Pulp, paper and paper products | - | Reduced levels of production, capacity utilisation and employment. New orders from the export market and export prices are more or less unchanged. The general outlook for Q1 is considered to be worse, and the weak development in production volume is expected to continue. Improved export market prices are expected in Q1. | |||||||||||||||||||||||||||||||||||||
| Basic chemicals | + | More or less unchanged levels of production and capacity utilisation. Increased level of employment. Rise in new orders from the domestic and export market. Improved market prices. A growing number of managers report that lack of raw materials and/or electric power limits production. The general outlook for Q1 is judged as positive. This view is supported by expectations of increases in output, new orders and market prices. | |||||||||||||||||||||||||||||||||||||
| Basic metals, non-ferrous | - | Reduced levels of production and capacity utilisation. More or less unchanged level of employment. The total stock of orders is reduced together with market prices. The general outlook for Q1 is considered to be worse. The negative development in market prices is expected to continue. | |||||||||||||||||||||||||||||||||||||
| Engineering, total | ++ | Overall, the engineering industries continue their positive development with a high level of activity. Increases in production, capacity utilisation and employment. Rise in new orders from the domestic and export market. Prices have improved in the domestic market, while export market prices seem to level out. Lack of qualified labour and activity level close to full capacity are limiting factor for production. The general outlook for Q1 is judged as better, and the positive development in production volume is expected to continue. | |||||||||||||||||||||||||||||||||||||
| Metal products | ++ | Continued positive development with increases in production, capacity utilisation and employment. The level of new orders has increased and market prices have improved in the domestic and export market. Lack of qualified labour and shortage of capacity limits production. The general outlook for Q1 is considered to be positive, and further increases in output, employment and new orders are expected. Market prices are expected to improve. | |||||||||||||||||||||||||||||||||||||
| Machinery and equipment | ++ | Many managers report higher levels of production, capacity utilisation and employment. Continued growth in the level of new orders from the domestic and export market. Market prices have improved further, especially in the domestic market. Lack of qualified labour and shortage of capacity limits production. The general outlook is judged as better. Further increases in output, employment and the stock of orders and prices are expected in Q1. | |||||||||||||||||||||||||||||||||||||
| Electrical and optical equipment | ++ | Many managers report continued growth in the levels of production, capacity utilisation and employment. The total stock of orders has increased as a result of an increase in new orders from the domestic and export market. Many managers consider the general outlook for Q1 as better. This view is supported by expectations of increased levels of output and new orders, together with improved domestic market prices | |||||||||||||||||||||||||||||||||||||
| Offshore-related activity incl. transport industry | ++ | Higher levels of production, capacity utilisation and employment. Rise in new orders, while the total stock of orders is more or less unchanged. Improved domestic market prices, while export prices are more or less unchanged. Lack of qualified labour and shortage of capacity are limiting factors of production. The general outlook is judged as positive, and increases in output, employment, new orders and prices are expected. | |||||||||||||||||||||||||||||||||||||
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The column for Prospects shows an overall evaluation of the present situation and expected short-term developments using the symbols +
and -. The following codes and constellations are used: |
++
+ 2 - -- -(+)+/- |
Very good
Good Stable Weak Very weak Weak, but with certain positive indications A situation where the + and - factors even out |
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Additional information
The statistics provide current data on the business cycle for manufacturing, mining and quarrying by collecting business leaders’ assessments of the economic situation and the short term outlook.
Contact
-
Edvard Andreassen
E-mail: edvard.andreassen@ssb.no
tel.: (+47) 40 90 23 32
-
Ståle Mæland
E-mail: stale.maeland@ssb.no
tel.: (+47) 95 05 98 88